Kraft Heinz Slips To Loss In Q4, But Results Top Estimates

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Kraft Heinz Co. (KHC) announced on Wednesday a net loss for the fourth quarter compared to a profit last year, hurt by steep non-cash impairment losses. However, both adjusted earnings per share and quarterly net sales topped analysts' estimates. The company also provided organic sales growth guidance for the full-year 2022.

"We are generating efficiencies to fuel incremental investments in our business, which, along with successful pricing, are mitigating inflationary pressures," said CEO Miguel Patricio.

For the fourth quarter, the company posted a net loss attributable to common shareholders of 257 million or $0.21 per share, compared to $1.03 billion or $0.84 per share in the prior-year quarter.

The loss was attributable to non-cash impairment losses of $1.3 billion, largely due to the impairment of the Kraft brand following the closing of the Cheese Transaction, higher interest expense and unrealized losses on commodity hedges.

Excluding items, adjusted earnings for the quarter were $0.79 per share, compared to $0.80 per share in the year-ago quarter.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined 3.3 percent to $6.71 billion from $6.94 billion in the same quarter last year. Analysts were expecting sales of $6.61 billion for the quarter.

Net sales included a negative 7.3 percentage point impact from acquisitions and divestitures and a favorable 0.1 percentage point impact from currency. Organic net sales increased 3.9 percent. Volume/mix was essentially flat.

Sales in the U.S. decreased 6.8 percent to $4.74 billion, while International sales grew 6.5 percent to $1.50 billion and sales in Canada increased 5.2 percent to $471 million from last year.

Looking ahead to fiscal 2022, the company now projects low-single-digit percentage increase in organic net sales. The Street is looking for sales decline of 5.0 percent to $24.59 billion for the year.

Separately, the Company's Board of Directors declared a regular quarterly dividend of $0.40 per share of common stock, payable on March 25, 2022, to stockholders of record as of March 11, 2022.

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